Transparency register: Filing obligation for all companies is coming

• Listed companies and their subsidiaries will also have to make filings in future

• Exemption regarding information that has already been entered in the commercial register no longer applies

On 1 August 2021, the German Transparency Register and Financial Information Act (Transparenzregister- und Finanzinformationsgesetz, TraFinG) will enter into force; the law was enacted by the German Parliament (Bundestag) on 10 June 2021. The TraFinG will make filings with the transparency register mandatory for all companies, even for companies that have not been obliged to file information about their beneficial owner with the transparency register so far; the transparency register will thus become a “full register” (Vollregister). The filing obligation therefore also applies to listed companies and their subsidiaries as well as companies for which the required information can be obtained from other registers, such as the commercial register; in these cases, the filing obligation was previously considered fulfilled, the companies therefore did not have to make filings with the transparency register.

According to the TraFinG, these companies must now also identify their beneficial owners and file them with the transparency register. All entries in the transparency register must then be kept up to date by means of change notifications (Änderungsmeldungen).

Beneficial owner is in general a natural person who directly or indirectly holds more than 25 per cent of the capital shares or voting rights of a company or exercises control over the respective company in a comparable manner. If there is no such person in the case of an AG (German stock corporation) or a GmbH (German limited liability company), in general the members of the board of directors or management are considered “presumed beneficial owners” (fiktiv wirtschaftlich Berechtigte).

Unfortunately, it remains unclear under the TraFinG whether these general principles will also apply to listed companies. This is because according to the TraFinG the aforementioned definition of the beneficial owner does explicitly not apply to listed companies. The exception was included in the text of the law shortly before it was enacted by the German Parliament. It is not yet clear how the administrative authorities will interpret the respective provision and what effects will result from it regarding the filing obligation of listed companies and their subsidiaries.

Whereas up to now there was no obligation to make a filing with the transparency register for companies whose members of the board of directors or management are considered “presumed beneficial owners”, as long as the information on the presumed beneficial owners could be seen from the commercial register, such companies now are obliged to make respective filings. It should also be noted that the respective filings with the transparency register must be updated whenever there is any change in the composition of the board of directors or management or in the data subject to registration (e.g. place of residence or surname).

For companies that become subject to filing obligations for the first time due to the amendment of the law, the following transitional periods shall apply within which the filing of the beneficial owner with the transparency register must be made:

Legal form	Transitional period expires on
Stock corporation (AG), European Company (SE), Partnership limited by shares (KGaA)	31 March 2022
Limited liability company (GmbH), Cooperative (Genossenschaft, e.G.), European Cooperative Society, Professional partnership (Partnerschaft, PartGmbB)	30 June 2022
In all other cases (in particular Foundations (Stiftung), Registered private partnerships (oHG, KG)	31 December 2022

In addition, the correlating provisions on fines and the obligation to submit discrepancy reports (Unstimmigkeitsmeldungen) are temporarily suspended.

However, the transitional provisions are only to apply to those companies which, according to the current legal situation, are not obliged to file their beneficial owners with the transparency register. Otherwise, the beneficial owner must be filed with the transparency register without undue delay. Companies that are newly established as of the day of entry into force of TraFinG (1 August 2021) also do not benefit from the transitional provisions and must file their beneficial owners with the transparency register without undue delay after their establishment.

The public can access the transparency register without having to give any special reason. As before the TraFinG, beneficial owners who have to be filed with the transparency register for the first time due to the amendment of the law have the possibility to apply for a restriction of access to the transparency register in order to protect their personal data. The requirement for the restriction is that the inspection is opposed by overriding interests of the beneficial owner that stand in the way of an inspection. Such a case may exist if the inspection would expose the beneficial owner to the risk of becoming a victim of certain serious criminal offences.

Against the background of the forthcoming change in the law, it is recommended that the filing practice with the transparency register is being reviewed. We’re happy to support you in this regard as well as in questions regarding any need for action (in particular filings, corrections, applications for restriction of access, fines or legal action). Please feel free to contact us!